Smart Telecom appeared last night to have come back from the brink of liquidation after a consortium led by businessman Brendan Murtagh, its biggest single shareholder, came forward with a proposal to refinance the troubled company.
Neither the value nor the terms of the refinancing package are known but a restructuring is likely to see Mr Murtagh and his colleagues make a proposal to take a rump of the company private, delisting it from the Alternative Investment Market (AIM) after two years in public ownership.
The implications of the development for Smart's senior management and its remaining staff are unclear because Mr Murtagh's consortium is considered likely to focus heavily on its broadband business, which has about 15,000 subscribers.
The fixed-line service that Smart delivered to 45,000 personal and corporate customers was cut off without warning on Monday after Eircom disconnected the service in a dispute over billing.
Talks chaired by telecoms regulator ComReg throughout yesterday resulted in a commitment from Eircom to begin restoring a partial outgoing call service today. Customers will be free to choose an alternative supplier.
ComReg, which insists it has no role in debt disputes, did not intervene in the case until the Minister for Communications, Noel Dempsey, asked it on Monday night to oversee talks, which began early yesterday.
Given Smart's failure to secure the continuity of the fixed-line service in the face of a disconnection notice from Eircom, which was extended three times, the company is unlikely in a new scenario to concentrate on a business in which public confidence has been severely undermined.
In a notice to the AIM early yesterday, Smart asked that its shares be suspended pending clarification of its financial position.
The next update from the company, which may came later today, is likely to confirm its receipt of a proposal from Mr Murtagh's consortium. This will have to be approved by the company's other shareholders, who include former Allied Irish Banks chairman Lochlann Quinn.
It was not known last night whether Mr Quinn has involved himself in Mr Murtagh's consortium. The identities of the other members of the consortium and their financial backers was also unknown. Given the continuing threat to the company's viability, a proposal that avoids liquidation might well be endorsed by shareholders.
Smart's difficulties spilled into the open last month when its founding chief executive Oisín Fanning resigned on health grounds.
As Smart made most of its staff redundant, it emerged that Mr Murtagh, who owns 20 per cent of the company, was keeping it afloat as it burned €2.5-€3 milllion per month in running costs.
In recent weeks, Smart has been run by its former chief operating officer Ciarán Casey, who replaced Mr Fanning as acting chief executive, and by its finance director, Brian Timmons.
